Ex-GAO head: US debt is three times more than you think

mmi said:

I would describe that as "a" definition, one that Forbes has formulated specifically to support this right-wing argument about SS and Medicare.

Here are some others:

The amount, at any given time, by which future payment obligations exceed the present value of funds available to pay them. — investorwords.com

a debt that is not covered by the value of assets, savings or investments that have been allocated to pay the debt. — Explainer: what are unfunded liabilities? (These guys take yer position, ignoring their own definition.)

not covered by an asset of equal or greater value. — Business Dictionary

Describing any liability or other expense that does not have savings or investments set aside to pay it. Free Dictionary (a lousy source, unfortunately)​

Note there is no reference to the present value of projected revenue.

But let's put that aside. I will agree that projected revenues will not cover projected outlays. But the total is far less than $65 trillion. Something like $30T seems more reasonable. See, e.g., "Does the United States have $128 trillion in unfunded liabilities?," WaPo, Oct 23, 2013

Let's control healthcare costs and grow GDP beyond projections.

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NO! Let's control Corporate Welfare Queen subsidies and grow GDP beyond projections.

mmi said:

I would describe that as "a" definition, one that Forbes has formulated specifically to support this right-wing argument about SS and Medicare.

Here are some others:

The amount, at any given time, by which future payment obligations exceed the present value of funds available to pay them. — investorwords.com

a debt that is not covered by the value of assets, savings or investments that have been allocated to pay the debt. — Explainer: what are unfunded liabilities? (These guys take yer position, ignoring their own definition.)

not covered by an asset of equal or greater value. — Business Dictionary

Describing any liability or other expense that does not have savings or investments set aside to pay it. Free Dictionary (a lousy source, unfortunately)​

Note there is no reference to the present value of projected revenue.

But let's put that aside. I will agree that projected revenues will not cover projected outlays. But the total is far less than $65 trillion. Something like $30T seems more reasonable. See, e.g., "Does the United States have $128 trillion in unfunded liabilities?," WaPo, Oct 23, 2013

Let's control healthcare costs and grow GDP beyond projections.

Click to expand...

Your first definition, what exactly do you think present value of funds available means? Hint... it's future inflows.

Second and third definition - Assets include present value of future expected inflows. It's basic accounting 101, it makes absolutely no sense to value only the gross liability which includes future obligations w/o considering future inflows.

Last definition as you say is a lousy source.

As far as the rest, no doubt it is a "soft" number as so many factors/estimates are involved in estimating NPV, a little change on an assumption can mean huge differences in the calculation.

Winchester said:

Your first definition, what exactly do you think present value of funds available means? Hint... it's future inflows.

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Is it? I'd say "future inflows" are not currently available.

>>Assets include present value of future expected inflows. It's basic accounting 101

I agree that it's very basic accounting. However, I'd say that future revenues cannot be regarded as equivalent to accounts receivable, typically defined as an asset. The taxes that will be collected in future years are not currently owed to the government. That obligation is created when the taxable income is collected.

>>it makes absolutely no sense to value only the gross liability which includes future obligations w/o considering future inflows.

I'm not doing that. I'm saying that both the outlays and the revenues associated with future years are not obligations. You've agreed that they are subject to revision. How can they be said to have a fixed value?

>>no doubt it is a "soft" number as so many factors/estimates are involved in estimating NPV, a little change on an assumption can mean huge differences in the calculation.

Exactly. All we have are projections. Isn't this the difference between a vested and an unfunded obligation?

DaveFagan said:

NO! Let's control Corporate Welfare Queen subsidies and grow GDP beyond projections.

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Sounds good t' me, but I don't see it happening without major campaign finance reform, like publicly funded elections.

DA60 said:

'The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

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For those who are interested, here's a short paper that was co-authored by David Walker on this issue:

http://www.hbs.edu/competitiveness/Documents/USComp-KaplanWalker-Govdebtcomp-WhitePaper-060713.pdf

PIPEWRENCH said:

When I figure my budget for next year I would love not to include retirement, deductibles for health care, the phone bill, the light bill, etc. Of course they could be lowered or even eliminated as well as be higher so lets not include them in our debt. What about the interest on my mortgage, if I pay off my loan no interest so I won't count that either. This kind of truth twisting finance is the reason we are so far in debt. The unwillingness to see the truth about our corupt parties and gvernment. The reason we cannot pay what we promised to our retired workers and social security is because someone didn't think it was necessary to figure that into the budget. Just brilliant.

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Eh...

Social Security would have worked just fine if it had been treated as a "lock box" all along. Instead it was used as a slush fund...




Either way, it's simply inaccurate to talk about future obligations as current debt. I get the point, but they are different things and words matter.